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Dear friends and colleagues,

Welcome to the winter edition of "LAPA News & Views" -- a quarterly newsletter from Laurence A. Pagnoni & Associates, Inc. (LAPA) providing innovative tips on nonprofit management and development.

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IN THIS ISSUE:

-- Working with Consultants: Who Can I Trust?
-- Assessing Your Organization's Fundraising Costs
-- "Ask LAPA": Answers to your questions

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A PERSONAL NOTE FROM LAURENCE: Working with Consultants – Who Can I Trust?

Sidney is a nonprofit Executive Director whom I've known for five years. She's a bright leader of an emerging (read small and struggling) social service nonprofit. She told me that she was considering hiring a consultant to meet her 2004 goals. However, she was having a hard time knowing when it was best to turn to consultants, and how to decide whom to trust.

Of course, since LAPA is a consulting firm, we have a clear interest in this issue. But executives are confronted by Sidney's dilemma on a regular basis, regardless of whether they are LAPA clients. As a former Executive Director (many times over) and as a current consultant, I have worked on both sides of the divide. And I've learned that trust, in the context of a true partnership, is the key issue.

The mistake that I made most often as an Executive Director was underestimating the value of a consultant's investment in learning about my organization. Too often, nonprofits hire consultants to work on a single project or a single grant. Even if they do a good job, they're not called back -- because the organization falls out of contact with them.

This is a tremendous waste! It is simply not cost effective for nonprofits to keep starting from scratch each time they need a contracted service. It means paying anew for the time it takes an unfamiliar consultant to get up to speed on your mission and programs. It is worth investing in long-term relationships with a select group of consultants that you can trust.

As President of LAPA, I know that building trust is a key issue from the consultant’s perspective as well. Most often you do not see how hard the consultant is working for you each day. If a consultant is doing a good job, that's an extraordinary amount of work. So how do you gauge the quality of the relationship? Consultants should address this dilemma by being reliable -- doing what they say they’ll do, when they say they'll do it. And they should bring clear value-added to your organization: You should know that you are stronger because of the work the consultant is doing or, at the very least, that you have a better set of problems than you had before!

Over a longer period of time, the trust factor between you and the consultant should vastly increase because you can see real results. Good or bad, you can usually expect the consultant to behave in the future as they have in the past. If you have been dissatisfied with your consultant's performance, it may be time for a change.

I hope you enjoy this edition of "LAPA News & Views," especially our new Q&A section, "Ask LAPA." In the future, please take the opportunity to send us any questions you may have.

Laurence A. Pagnoni, MA, MPA
lapagnoni@lp-associates.com

P.S. Please forward this newsletter to others whom you feel it would benefit. If you would like to be removed from our list, follow the instructions at the end of the page. Thank you and enjoy!

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ASSESSING YOUR ORGANIZATION’S FUNDRAISING COSTS

by Bodi Luse, LAPA Associate

Wondering how your fundraising costs stack up against industry standards? Experience has shown us that standards such as those promoted by the Wise Giving Alliance can provide general benchmarks, but that nonprofits' costs vary widely based on factors like age, size, mission, and sources of funding. When you're trying to assess your organization’s fundraising costs, it is necessary to compare yourself to organizations with similar characteristics.

Along these lines, a 2003 report of the American Association of Fundraising Counsel offers some important reminders we thought might be of benefit to you:

1. Large organizations spend more on management expenses (including fundraising) than do smaller organizations, but those expenses are a smaller percentage of the total budget.

2. Small, government-funded nonprofits have higher management costs because they spend a disproportionate share of their budget securing grants and complying with requirements. These inefficiencies disappear with middle-sized and larger organizations.

3. Health, arts, education, and environmental organizations have higher overall management costs, including fundraising and administration, than other types of organizations.

4. Smaller organizations have higher fundraising costs than equivalent larger organizations. Also, management and general expenses rise with age for nonprofits with revenues of less than $1 million.

LAPA often works with clients to examine their organization's fundraising costs and help develop a plan for greater efficiencies. For more information on how to assess what it costs you to raise a dollar, or on the American Association of Fundraising Counsel report, contact Bodi Luse at bluse@lp-associates.com.

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"ASK LAPA": ANSWERS TO YOUR QUESTIONS ABOUT MANAGEMENT AND FUNDRAISING ISSUES.

Q. Dear LAPA,
Our end-of-the-year appeal was not as successful as we had hoped. It seems that even our long-time donors are starting to burn out. Is it our message? We've already indicated that their help is more urgently needed than ever. What should we do?

- Joe in Yonkers


A. LAPA Associate Raissa Smorol responds:
Dear Joe,

As we see it, two central issues are in play. First, as you correctly identify, is that your donors appear to be immune to your current ask strategy. It sounds like you've been over-using a "sky is falling" message. You might try a focus on hope in your next appeal. Current research on donor behavior indicates that, increasingly, people want to feel like they are partners in a "solution" to a problem. With the proliferation of nonprofits, your organization needs to stand out as an effective agent of change. The more you can demonstrate exactly how you are making a difference, the better your chances of building donor confidence and long-term loyalty to your organization.

Second, it may be time to take a closer look at who is on your donor list. Although it can be scary, we suggest that you ask those people who have been on your list for a long time if they prefer to stay or to be removed. It is better to have a short list of dedicated donors than a long list of people who ignore your requests. Taking the time now to clean your list will save you time and money in the long run. It can also spur you to find new and better contacts that might be interested in your appeal.


DO YOU HAVE QUESTIONS FOR LAPA? Please e-mail your queries to lapagnoni@lp-associates.com with the subject "Ask LAPA." Our team will answer as many of your questions as possible in future newsletters.

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LAPA associates may be reached as follows:

Enid Harlow, MA: eharlow@lp-associates.com

Melissa Shurkin, MMHS: mshurkin@lp-associates.com

Bodi Luse, MS: bluse@lp-associates.com

Mark Engler, BA: mengler@lp-associates.com

Katie McMullen, BA: kmcmullen@lp-associates.com

Elsa Rios, MSW: elsarios7@aol.com

Julia Ritchie, CSW: ritchieinc@aol.com